BMW has signed battery-supply contract worth $1.16 billion with CATL

BMW has signed battery-supply contract worth $1.16 billion with CATL

According to a recent confirmation by German automaker BMW via Reuters, the company has signed a battery-supply contract with Chinese battery manufacturer CATL. The move underscores an attempt by BMW to secure long-term battery supply for the future production of its electric vehicles (EVs).

With the batteries of BMW’s EVs presently being provided by Samsung SDI, the automaker -- which has no plans to manufacture its own battery cells -- has disclosed via Reuters that its new contract with CATL is worth more than one billion euros ($1.16 billion).

BMW’s contract with CATL does not pertain to the batteries which are being produced by CATL in China, but for financing the battery maker’s new factory in Europe. CATL is already looking at locations for its European factory, which will enable the company to increase its overall battery-production capacity.

The current production capacity of CATL is 17.5 GWh, and the company has efforts underway to ensure that the production can be quickly ramped up to 24 GWh by 2020. For building its new European factory to add to its overall production capacity, CATL is presently setting up an IPO to raise $2 billion.

The batteries being produced by CATL chiefly use LiFePo and NCM chemistries in prismatic cell formats. The company’s batteries are largely being used for the production of plug-in-hybrids and electric buses.